The International Arbitration Review: Romania
Romania is a civil law country, and in the civil law tradition the Romanian arbitration law (arbitration law) is codified.2 In addition, and similar to other civil law jurisdictions, Romania does not recognise binding precedent, but court decisions and arbitral awards can be used as persuasive authorities.
i Overview of the arbitration law in Romania
Romania has not adopted the UNCITRAL Model Law,3 but its arbitration law is consistent with the general principles of the Model Law.
The arbitration law regulates the arbitration agreement and its form, the composition of the arbitral tribunal, the conduct of the arbitral proceedings (including rules for the taking of evidence), the allocation of arbitration costs, the arbitral award, including the setting aside and the enforcement procedure, as well as the recognition and enforcement of foreign arbitral awards. It contains also some general provisions regarding institutional arbitration.
The arbitration law follows the principle of granting parties procedural freedom and, to this end, it allows parties and arbitral tribunals to establish different procedural rules as long as they are not contrary to public policy and the mandatory provisions of the law.4
As regards arbitrability, a broad range of disputes can be referred to arbitration in Romania, except for disputes pertaining to personal status, personal capacity, inheritance or family relations; and disputes pertaining to rights that parties cannot freely dispose.5
Among the departures from the Model Law are the following.
In the case of domestic disputes related to the transfer of property or the creation of other rights in rem regarding immovable assets, the arbitration agreement must be authenticated by a public notary under the sanction of absolute nullity.6 In all the other cases, the general rule regarding the written form applies, but unlike the Model Law, the arbitration law provides expressly the sanction for not observing this requirement, which is the nullity of the agreement.7
Although the arbitration law allows arbitral tribunals to grant interim measures, it does not contain such a detailed regulation of these issues as the Model Law. It provides, however, that in cases where a party refuses to comply with the interim measures ordered by an arbitral tribunal, the court can order the enforcement of these measures.8 On the other hand, the interested party can address the court directly to obtain such interim measures both before and during the arbitral proceedings.9
The arbitration law prescribes a time limit within which an arbitral award must be rendered. Thus, unless the parties agree otherwise, an arbitral tribunal must render its award within six months from the date it was constituted.10 The time limit can be extended by the parties' written agreement or by the tribunal.11
The arbitration law provides for a shorter deadline for filing the setting aside claim, which is one month from the receipt of an award.
It also provides additional grounds for setting aside apart from those regulated by the Model Law. For example, an arbitral award may be set aside if it is not reasoned,12 if it has been rendered after the time limit provided by the law13 or if the Constitutional Court declares as unconstitutional a legal provision relevant to the arbitration following the admission of an unconstitutionality objection raised in those proceedings.14
If the court sets aside an award based on the grounds that the dispute was not arbitrable or if the time limit within which an arbitral award must be rendered was not complied with, the case will be referred to the competent national court to render a decision on the merits of the case. However, if the award is set aside for other grounds, the court will refer the case for 'retrial' to the arbitral tribunal, if at least one of the parties requests it.
Romania is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and to the Geneva Convention on International Commercial Arbitration (1961). Thus, in terms of recognition and enforcement of foreign arbitral awards, the arbitration law applies only where an award was issued in a state that is not party to the New York Convention or where it contains provisions that are more favourable than those of the New York Convention. When considering grounds for refusal to recognise foreign arbitral awards, the provisions of the arbitration law are similar to those of the New York Convention.15
ii Distinctions between international and domestic arbitration law
Although the arbitration law formally distinguishes between international and domestic arbitration by regulating them under different chapters,16 there are not very many distinctions between the two.
One of the main differences is that in the case of international arbitration, the time limits are doubled. In addition, while in domestic arbitration the arbitration expenses are borne by the losing party, in international arbitration, unless the parties agree otherwise, the arbitrator's fees and travel expenses are borne by the appointing party (the expenses of the presiding arbitrator or the sole arbitrator are borne in equal shares by both parties).
iii The role of the Romanian courts in arbitration
The Romanian court system is divided into district courts, tribunals, courts of appeal and the High Court of Cassation and Justice. A case, however, will not be tried by all these courts; it can go through either two or three instances, depending on its nature.
There are no specialist courts in the state system to deal solely with arbitration matters. Setting aside claims are tried in first instance by the court of appeal in the jurisdiction where the arbitration took place. The decision of the court of appeal is subject to a final appeal only on points of law at the High Court of Cassation and Justice. Claims for the recognition and enforcement of foreign arbitral awards are tried in first instance by the tribunal where the losing party is domiciled or headquartered (when it is impossible to determine the domicile or the headquarters, the competent court is the Bucharest Tribunal). The decision of a tribunal is subject to appeal to the court of appeal.
During the arbitral proceedings, Romanian courts can intervene in matters such as:
- the appointment of the arbitral tribunal when the parties do not reach an agreement in this respect;17
- applications for constraints and sanctions on witnesses and experts;18
- compelling public authorities to provide the arbitral tribunal with written evidence, documents, or both;19 and
- granting interim or conservatory measures.20
iv Local arbitral institutions
The main arbitral institution is the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (CICA-CCIR), which has a history of more than 65 years in this field. Other arbitral institutions are Bucharest International Arbitration Court, which was established under the auspices of the American Chamber of Commerce in Romania, and the Permanent Court of Arbitration of the Romanian-German Chamber of Commerce and Industry. In addition, almost every local chamber of commerce has a court of arbitration attached to it, but they are mostly used for domestic arbitrations.21
The year in review
i Developments affecting international arbitration
The most recent figures in the International Chamber of Commerce (ICC) Dispute Resolution statistics22 seem to indicate a slight decrease in the number of arbitration cases involving Romanian parties on the ICC docket (19 in 2019 compared to 27 in 2018).
In our opinion, these figures do not suggest a downward trend in arbitration in Romania, but rather a shift from the ICC jurisdiction to the jurisdiction of the local arbitration institutions, which might have been caused by recent developments at the normative level. These developments regard the revision of the arbitration rules of the main arbitration institution in Romania (CICA-CCIR) and the adoption of new governmental regulations that led to the replacement of ICC jurisdiction with CICA-CCIR jurisdiction in public procurement construction contracts. For example, in 2019, there were 125 cases registered with CICA-CCIR, and most of the disputes arose from construction contracts (FIDIC) and lease contracts.23
New CICA-CCIR Rules of Arbitration
As of 1 January 2018, CICA-CCIR has applied new Rules of Arbitration that aim to ensure alignment with best international practice and to meet the current requirements of arbitration users. Noteworthy changes include the following:
- the introduction of emergency arbitrator proceedings for resolving urgent issues before an arbitral tribunal is constituted;24
- the introduction of expedited arbitration proceedings for disputes amounting to less than 50,000 lei;25
- improvements to the case management process through the introduction of the requirement for arbitral tribunals to convene a case management conference and to establish the procedural timetable they intend to follow for the conduct of an arbitration;26 and
- the inclusion of new, more detailed provisions on multi-party arbitration.27
Shift from ICC jurisdiction to CICA-CCIR jurisdiction in public procurement construction contracts
On 10 January 2018, the government approved the new general and specific conditions for construction work contracts financed by public funds. These conditions are mandatory for contracts amounting to over €5 million,28 but public authorities can also use them for contracts having a smaller value.
The contracts provide a CICA-CCIR arbitration clause, thus replacing the jurisdiction of the ICC International Court of Arbitration (ICC), which was applicable under the former FIDIC-based general conditions.
ii Arbitration developments in local courts
Emergency arbitrator proceedings
Romania became acquainted with the emergency arbitrator proceedings rather recently,29 and it caused quite a stir in the country's legal practice. Although the emergency arbitrator proceedings have been generally welcomed by arbitration users, recent court cases reveal that there are still some issues to be contemplated in this field.
For example, in the first dispute submitted to CICA-CCIR under the emergency arbitrator proceedings, the parties had a heated debate on the compatibility of the new provisions with an arbitration agreement concluded before their entry into force, and which provided for all the disputes under the agreement to be resolved by three arbitrators.
Ultimately, the Bucharest Court of Appeal set aside the order issued by the emergency arbitrator in those proceedings on the grounds that the arbitral tribunal was not constituted in accordance with the arbitration agreement. The court ruled that the parties' will prevails over the arbitration institution rules, and since the arbitration agreement provided that any disputes be resolved by three arbitrators (without making any distinction regarding their nature and subject matter), it should be concluded that the dispute on interim measures falls under this provision and had to be resolved by three arbitrators as well.30
Another setting aside case trialled by the Bucharest Court of Appeal in the emergency arbitrator field showed that some Romanian courts might be reluctant to accept such proceedings at all.
Thus, the court ruled that emergency arbitrator proceedings are contrary to the mandatory provisions of Romanian law,31 and consequently set aside the interim measures granted by the emergency arbitrator. To this end, the court found that under Romanian arbitration law, interim measures can be granted before the commencement of an arbitration only by the state courts, while the arbitral tribunal can grant such measures only during the arbitral proceedings.32 The court deemed that this provision is mandatory and part of the Romanian public policy, and that therefore it cannot be deviated from by an arbitration agreement or by the rules of an arbitration institution.33
On another occasion, however, another panel of the Bucharest Court of Appeal maintained an order issued by an emergency arbitrator, ruling that there was no ground for setting it aside. The emergency arbitrator ordered the suspension of a bank letter of guarantee so that it could not be enforced by the beneficiary until the resolution of the arbitration. In setting aside proceedings, the court had to analyse whether the conditions for granting the provisional measures were met, as under the Romanian law, a setting aside claim against orders on provisional measures entails a review of the merits.34 In the court's view, the fact that the beneficiary had not asked for the payment of the bank letter of guarantee yet did not mean that there was no urgency in taking the measures, because what was relevant was the beneficiary's possibility to ask for payment at any moment.35
Interpretation of arbitration agreements
Over time, pathological arbitration clauses have been a recurring issue on the agenda of the Romanian courts and of the arbitral tribunals dealing with agreements connected to Romania. The defects vary, but include, to name a few:
- reference to more than one arbitral institution or to a non-existent arbitral institution;
misnaming of the arbitral institution; and
- the appointment of one arbitral institution to administer proceedings under the rules of a different institution.
In a very recent case, an ICC arbitral tribunal had difficulties in determining the arbitral institution to which the parties' agreement was referring, as it was defined differently in various contractual documents. Thus, the particular conditions of contract provided for arbitration under the Arbitration Rules of the International Chamber of Commerce. Further, the appendix to tender (which was also part of the contract) provided that the institution mentioned in the particular conditions of contract is 'the Court of International Commercial Arbitration', that the seat of arbitration was Bucharest, Romania, and that the proceedings would be conducted in Romanian.
The structure and the wording of the arbitral agreement generated debates on whether it referred to the ICC Court of Arbitration or to the local arbitral institution (that is, CICA-CCIR).
The arbitral tribunal ruled that it did not have jurisdiction, and its view was upheld in the setting aside proceedings. To this end, the Bucharest Court of Appeal found that under the order of precedence mentioned in the contract, the appendix to tender prevailed over the particular conditions of contract and, therefore, the arbitration agreement mentioned in the appendix to tender had to be considered. Further, it found that the arbitration agreement should be interpreted as referring to CICA-CCIR given, on one hand, the name mentioned in the agreement, which coincided with the name of the local court of arbitration and, on the other, the Romanian context of the contract (the law applicable to the contract, the seat of arbitration and the language of the proceedings). In addition, it held that the applicable ICC Rules of Arbitration (1998) did not prohibit arbitral institutions other than ICC to administer arbitrations under these Rules.36
While this decision would be debatable in the context of the 2012 ICC Rules of Arbitration, according to which the ICC Court of Arbitration is the only body authorised to administer arbitrations under the Rules, it speaks to the Romanian courts' tendency to give effect to pathological arbitration clauses by means of interpretation rather than declaring them invalid.
Contrary to the aforementioned decision, in a recent case, the High Court of Cassation and Justice of Romania has decided that an arbitral clause that designates the arbitral institution as The Court of International Commercial Arbitration might be unclear regarding the designated arbitral institution, however, given that the clause establishes the Rules of Arbitration of the International Commerce Chamber (ICC Rules) as applicable, it must be interpreted as designating the Court of International Arbitration ICC Paris as the only institution that has the authority and the actual possibility to apply the ICC Rules, especially given that the Court of Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania has its own Rules of arbitration.37
In another interesting case38, the Constanta tribunal has referred to the arbitral tribunal a dispute regarding the annulment of a report issued by a public institution that held the misconduct of a party in the performance of a public works contract. Even though the public works contract contained an arbitral clause, it was the vast majority of the case law that held that such a report is an administrative act and therefore it falls outside the scope of the arbitration agreement and it can only be annulled by a national court. The Constanta tribunal reasoned that such a document derives from the contract, and, therefore it falls into the jurisdiction of the arbitral tribunal. The arbitral tribunal also reasoned that it has jurisdiction over that report given that it is the arbitral tribunal that must determine whether the contract was performed accordingly39. The report was therefore annulled through the award no. 28/22 April 2019. The set aside the Bucharest Court of Appeal also denied action against this award.40 The latter decision is currently pending an appeal before the High Court of Cassation and Justice of Romania.
Public policy as a ground for the annulment of arbitral awards
Public policy has probably been the most common ground invoked in setting aside claims filed with the Romanian courts. In the past year, the Romanian courts have not been spared from analysing this concept, which, because of the parties' inventiveness, had to be considered from various angles.
In a recent decision,41 the Bucharest Court of Appeal has interpreted the notion of public policy in a very clear manner and with a very interesting reasoning. It has held that the public policy represents the supremacy of the rules that protect the general interests of the society over the conventional rules that are inspired by particular interests. Moreover, it reasoned that the public policy is not limited to the express mandatory provisions of the law, but it is a notion that is always adaptable to the present and future social needs, and therefore, a court can censor and declare null and void certain conventional agreements if it finds that they were in breach of one or more principles of social organisation, even if an express mandatory provision was not breached. Additionally, the court concluded that, when the law is silent, the judges can determine that a legal provision represents public policy, when that provision is essential to protect the general interests of the society.
The Bucharest Court of Appeal clarified that the setting aside court cannot analyse issues that have not been invoked before the arbitral tribunal and on which the latter has not issued a decision, even if they were public policy.42 In the same way, the High Court of Cassation and Justice of Romania has decided that the irregularities regarding the existence and validity of the arbitration agreement, the constitution of the arbitral tribunal, the limits of the arbitrators powers, the procedural framework or the proposal of evidence cannot be invoked directly in the set aside action, but they must be raised first before the arbitral tribunal.43
Also, the High Court of Cassation and Justice of Romania has ruled constantly that the grounds for setting aside an award are expressly and limitedly provided by the law and, in a set aside proceeding, the court cannot reanalyse the merits of the case in relation to which the arbitral tribunal has rendered a decision.44 On the same note, in another case the Bucharest Court of Appeal decided that the manner in which the arbitral tribunal fixed the arbitration fees cannot be subject to review in the setting aside proceedings.45
On another occasion, the Bucharest Court of Appeal had to decide whether the fact that the arbitral tribunal had not played an active role in the arbitral proceedings could amount to a breach of the Romanian public policy. The claimant argued that the arbitral tribunal failed to analyse several issues relevant to the validity of the agreement subject to the dispute, and also failed to take evidence in this respect. In the claimant's view, this was equal to a breach of the duty to take all the legal means to find out the truth in the case – known also as the court's active role – which is considered a fundamental principle of law in Romania and would be applicable to arbitration as well.46 The court dismissed the setting aside claim, ruling that the arbitration is not focused on finding the truth, but rather on an assessment of the parties' arguments, and therefore the arbitrator's lack of an active role does not infringe public policy.47
The provisions on the statute of limitations are frequently invoked as public policy grounds in setting aside claims, but the Bucharest Court of Appeal has not accepted these arguments under the current law, which allows the parties to change the limitation terms and their course. For example, it decided recently that a violation of the provisions regarding the suspension and interruption of the limitation term could not justify the setting aside of an award.48
Also during the past year, the Bucharest Court of Appeal had several occasions to enhance its jurisprudence according to which the disregarding and wrong interpretation by the arbitral tribunal of the contractual provisions cannot serve as public policy grounds for setting aside an arbitral award.49 In this respect, it held that the disregard of the arbitral tribunal of the contractual provisions under which the claimant had to first attempt an amicable settlement of its dispute is not subject to a judicial review in setting aside proceedings.50 Given the current pandemic context that governed the year 2020, the Bucharest Court of Appeal also had the opportunity to analyse the public policy character of the procedural measures that were introduced through the Presidential Decree No. 195/2020 which instated the national emergency state in Romania. The Bucharest Court of Appeal has set aside an arbitral award in which the claimant's request was annulled given that it did not pay the arbitral fees in due time.51 The Bucharest Court of Appeals has reasoned that the provisions of the aforementioned Presidential Decree that provided a suspension of all procedural time limits, whether statute of limitation or preclusion terms, apply to the arbitral proceedings as well. Moreover, the same court ruled that the interdiction to trial any cases except the matters involving extreme urgency also applies to the arbitral proceedings. Thus, the court found that there was a breach of public policy and mandatory provisions of the law and has set aside the arbitral award for these reasons.
Recognition and enforcement of foreign arbitral awards
In terms of exequatur proceedings, the Bucharest Court of Appeal clarified that an award has to be recognised as it was granted and that the exequatur court cannot change the currency of the amounts mentioned in an award. In the case in question, the amount in the award was expressed in euros, while the first instance court had converted it into lei in the decision on recognition and enforcement.52
In addition, over the past year, the Romanian courts have dealt with the issue of the improper service of an arbitral award in the context of it being sent to the address of the party's attorney after the attorney–client relationship had been terminated. The defendant argued that because the award was not properly served, the exequatur claim was premature. The court denied this objection, holding that the defendant had not notified the arbitral tribunal about the change of its attorney before the communication of the award. Further, although such a notification was sent after the communication of the award, it still lacked any relevance as it referred only to the proceedings regarding the counterclaim and did not show the place where the procedural acts or the arbitral award were to be communicated from then on.53
In a recent decision, the Oradea Court of Appeal has decided that the recognition and enforcement of a foreign arbitral award cannot be denied based on the fact that the parties have not designated a certain procedure to designate the arbitrators, as long as the parties have agreed to apply the rules of an arbitral institution.54
In another decision, the Bucharest tribunal held that the mere fact that a defendant, public institution, has invoked the lack of funds provided to it by the government to pay for the damages ordered in an arbitral award cannot stand as a ground to deny the recognition and enforcement of an award and it does not exempt the defendant from its obligation deriving from the award.55
Insolvency proceedings and arbitration
The Romanian courts were confronted with the issue of whether an arbitral tribunal's failure to suspend an arbitration because of insolvency proceedings opened against a defendant in another country would justify the setting aside of an award.
The court found that under the Portuguese law, which was the law applicable to the insolvency proceedings in question, suspension was mandatory. However, the court held that the issue of whether suspension was required should be determined in accordance with Romanian law because under EU Regulation No. 1346/2000, the effects of insolvency proceedings on a pending lawsuit shall be governed solely by the law of the state in which that lawsuit is pending. Further, because Romanian law does not provide for an obligation to suspend lawsuits or arbitrations in cases of a composition (such as the one undergone by the defendant in Portugal), the court concluded that the arbitral tribunal did not err when it denied suspension of the arbitration at hand.56
In another case, the court ruled that the provisions of the Insolvency Law according to which set-off can occur only if both debts arose either before or after the commencement of an insolvency are mandatory and, consequently, their breach by the arbitral tribunal led to the annulment of the arbitral award at hand.57
iii Investor–state disputes
To date, Romania has faced 18 International Centre for Settlement of Investment Disputes (ICSID) cases, of which nine are still pending.58 There have been also investment arbitrations brought against Romania before other arbitral institutions (such as ICC or the Permanent Court of Arbitration), but given the confidential nature of these procedures, usually there is no public data available in this respect.59
As regards the ICSID cases that have been already concluded, five were awarded in favour of the state,60 three in favour of the investors,61 one was discontinued62 and one was decided in favour of neither party (liability found, but no damages awarded).63
Micula and others v. Romania
Micula and others v. Romania (II)64 is the most recently decided case against Romania, in which the arbitral tribunal rendered its award on 5 March 2020. The case concerned claims amounting to more than 9 billion lei brought under the Romania–Sweden bilateral investment treaty (BIT).65
The claimants alleged that Romania failed to adequately enforce its laws on the taxation of spirits in the alcohol black market and to control the illicit alcohol sales and tax evasion of illegal alcohol producers, causing an alleged negative impact on the claimants' licit alcohol production business in Romania.66 In addition, they argued that Romania had breached its obligations under the BIT by enacting a new pricing regime for mineral water.67
The arbitral tribunal ruled, however, that Romania's alleged failure to enforce its laws on the taxation of spirits has not been established by the claimants. To this end, it found that 'Romania has engaged in 'serious and visible' efforts to enforce its taxation laws in relation to alcohol'. According to the tribunal, Romania 'has established that it has a sophisticated mechanism for the enforcement of its laws, a strategy of ensuring that enforcement is cost-effective and a structure for enforcement at both the household producer and industrial producer levels'. The tribunal further ruled that it lacked jurisdiction to consider the claims relating to the pricing regime for mineral water on the basis that the regime had been enacted before the BIT came into force in 2003.68
In addition, the past year saw some important developments in Micula's endeavours to enforce another ICSID award issued in 2013. Thus, in Micula and others v. Romania (I),69 an ICSID tribunal found that Romania was liable for breaching the Romania–Sweden BIT by withdrawing certain economic incentives that had been previously granted to promote investment in underdeveloped regions of the country. Consequently, the tribunal awarded the claimants compensation that is currently evaluated at €305 million.70
Since then, the claimants have been trying to enforce the award in Romania, Belgium, France, Luxembourg, Sweden, the United Kingdom and the United States,71 but their attempts have been hindered by, among other things, a 2015 European Commission decision stating that payment by Romania of the compensation provided in the award was prohibited under EU state aid rules.72
In June 2019, the European Union's General Court annulled the 2015 European Commission decision, considering that EU state aid law was inapplicable because all the actions that led to the issuance of the award occurred before Romania's entry into the EU in 2007.73 The European Commission appealed this decision before the Court of Justice of the European Union, with a final decision yet to be rendered.74
Further, on 19 February 2020, the UK Supreme Court ordered that the 2013 ICSID award be enforced in the UK, lifting a stay on enforcement previously granted by the High Court and upheld by the Court of Appeal until the final resolution of proceedings on the validity of the European Commission decision.
The Supreme Court held that English courts have the power to stay enforcement of an ICSID award in limited circumstances pertaining to procedural grounds, but in this case, the stay was sought on substantive grounds, and thus it was not consistent with the UK's duty under the ICSID Convention to recognise and enforce the award. Further, it held that the UK's duty of sincere cooperation under the EU law, which required it to ensure compliance with EU law and to assist EU bodies in carrying out their tasks under the EU treaties, did not affect the UK's prior obligation under the ICSID Convention to enforce the award.75
In the meantime, on 11 September 2019, the award was recognised and enforced in the United States by a federal court in Washington, DC, which dismissed the objection of the European Commission that the award is incompatible with EU law. The decision was based on, among other grounds, the following findings: all the key events in the case, and even the commencing of the arbitration, had occurred before Romania acceded to the EU; the law applicable to the dispute was the BIT's substantive rules, not EU law; and the European Union's General Court overturned the European Commission decision.76
As regards the claimants' attempts to enforce the award in Romania, they were partially successful, as the Bucharest tribunal allowed the enforcement requested by Ioan Micula and subsequently dismissed the state's challenge against the order of enforcement. To this end, the Bucharest tribunal dismissed the state's arguments that the award had to be recognised in Romania prior to its enforcement in view of the fact that under Article 54 of the ICSID Convention, the state as party to the arbitration had the duty to recognise the award as binding and to comply with it. The tribunal did not accept the state's arguments related to the incompatibility of the enforcement with EU state aid rules either, holding that an analysis of these arguments would entail a review of the award on its merits, which is not allowed under the ICSID Convention.77
The Bucharest Court of Appeal upheld these arguments. However, it partially granted the state's challenge, finding that the enforcement acts performed after the submission of the application for annulment of the award had to be annulled because of the fact that the enforcement was stayed under the ICSID Convention pending a decision of the Committee. In addition, the Court of Appeal ruled that the enforcement could not be allowed for the entire amount of the award as the state's debt had been partially extinguished by being offset against a tax debt owed by one of the claimants to the ICSID arbitration.78
However, the following attachment proceedings initiated by Micula in connection with the shares owned by the state in two Romanian companies seem to have been suspended at the end of 2019.79 The details of this case and the reasons that led to the suspension of the enforcement are not publicly available.
Nevertheless, from the publicly available information80 it seems that the Romanian government has paid the amounts ordered in the award, amounting to more than €300 million, to avoid blocking the activity of essential public institutions that had their funds seized as a result of the enforcement proceedings.
Pending ICSID cases involving Romania
The following cases are still pending:
- Fin.Doc S.r.l and others v. Romania81 that concerns claims brought under the Energy Charter Treaty in relation to Electric Power & Other Energy;
- EP Wind Project (Rom) Six Ltd. v. Romania82 that concerns claims brought under the Energy Charter Treaty in relation to Electric Power & Other Energy;
- Petrochemical Holding GmbH v. Romania,83 which concerns claims brought under the Energy Charter Treaty in relation to a petroleum development contract;
- Alverley Investments Limited and Germen Properties Ltd v. Romania,84 which regards claims brought under the Romania–Cyprus BIT in relation to a commercial and residential real estate project in northern Bucharest. The claims arose out of the sequestration by the National Anti-Corruption Directorate of a land plot on which claimants intended to develop their project;85
- LSG Building Solutions GmbH and others v. Romania,86 which concerns claims brought under the Energy Charter Treaty in relation to a photovoltaic power plant located in Romania's Giurgiu region. The claims arose out of certain changes to Romania's incentive scheme for investments in the renewable energy sector;87
- Nova Group Investments, BV v. Romania,88 which regards claims brought under the Romania–Netherlands BIT in relation to a majority shareholding in Astra Asigurari, a local insurance company. Claims arose out of government actions that allegedly led to the bankruptcy of Astra Asigurari;89
- Gabriel Resources Ltd and Gabriel Resources (Jersey) v. Romania,90 which regards claims brought under Romania–Canada BIT and Romania–United Kingdom BIT in relation to a mining concession. Claims arose out of the state's allegedly discriminatory measures in relation to the approval of an environmental impact assessment and the issuance of an environmental permit required to start the exploitation of the claimant's mining project;91 and
- Alpiq AG v. Romania,92 which concerns claims brought under Romania–Switzerland BIT and the Energy Charter Treaty in relation to two long-term energy delivery contracts. Claims arose out of the allegedly abusive termination of the contracts concluded between the claimant's local subsidiaries and Romania's state-owned electricity utility Hidroelectrica after the latter was declared insolvent.93 On 9 November 2018, the arbitral tribunal dismissed Alpiq's claims, but the claimant submitted an action for the annulment of the award, which is still pending.
Outlook and conclusions
Arbitration is continuously developing in Romania. The country has been making efforts to ensure compliance with best practice in this field, and it has been involved in a fair number of arbitrations, both international and domestic. The year under review also showed that the Romanian courts have a good grasp of the arbitration concepts and tend more and more to have a pro-arbitration approach.
Romania recently gained the attention of the international arbitration world owing to, among other things, the debates generated by the enforcement of the 2013 ICSID award in Micula and its compatibility with EU state aid law. Most probably, it will remain in the spotlight for a while, as the Micula saga has not ended yet, and there are some other pending cases in Romania that will remain interesting to watch as they evolve.
Outloook and conclusions
1 Sorina Olaru is a partner and Daniela Savin (Ghervas) is a managing associate at Nestor Nestor Diculescu Kingston Petersen.
2 Book IV and Book VII of the Romanian Civil Procedure Code (CPC).
4 Article 541(2) CPC.
5 For example, disputes regarding labour conflicts or those pertaining to social insurances cannot be subject to arbitration (see also C Leaua and F Baias, Arbitration in Romania. A Practitioner's guide, Wolters Kluwer 2016, p. 88).
6 Article 548(2) CPC.
7 Article 548(1) CPC.
8 Article 585(4) CPC.
9 Article 585(1) CPC.
10 Article 567(1) CPC.
11 Article 567(3)-(4) CPC.
12 Article 608(1)(g) CPC.
13 Article 608(1)(e) CPC.
14 Article 608(1)(i) CPC.
15 Article 1129 CPC.
16 Domestic arbitration is governed by Book IV of the CPC (Articles 541–621), while international arbitration is governed by Book VII (Articles 1111–1133).
17 Article 561 CPC.
18 Article 589(3) CPC.
19 Article 590 CPC.
20 Article 585(1) CPC.
21 Romania is administratively divided in 41 counties, each of which has a local chamber of commerce (Brasov Chamber of Commerce and Industry, Timisoara Chamber of Commerce and Industry etc.).
23 The analysis regarding the available alternative to resolve the disputes in a more timely manner, published by the Romanian Superior Council of Magistracy.
24 Annex 2 to CICA-CCIR Rules of Arbitration (2018).
25 Annex 5 to CICA-CCIR Rules of Arbitration (2018).
26 Article 31 of CICA-CCIR Rules of Arbitration (2018).
27 Article 16 of CICA-CCIR Rules of Arbitration (2018).
28 Government Decision No. 1/2018.
29 As shown in the 'Developments in international arbitration' chapter, the emergency arbitrator proceedings have been introduced in CICA-CCIR Rules of Arbitration only on 1 January 2018.
30 Bucharest Court of Appeal Decision No. 47/7 June 2018.
31 Under Article 608(1)(h) CPC, arbitral awards can be set aside if they are contrary to public policy, good moral conduct and the mandatory provisions of the law.
32 Article 585 CPC.
33 Bucharest Court of Appeal Decision No. 76/25 July 2019. For comments on this decision see S Olaru and C Badea, 'Emergency Arbitration in Romania - The Perilous Path away from Progress', available at www.lexology.com/library/detail.aspx?g=11fe9916-c43b-4f3e-9eab-8bef9921ad5c.
34 Under Article 594(3) CPC, setting aside claims against orders on provisional measures can regard not only the usual grounds for the setting aside of arbitral awards, but also for the non-fulfilment of the conditions provided by the law for the measures in question.
35 Bucharest Court of Appeal Decision No. 102/10 December 2019.
36 Bucharest Court of Appeal Decision No. 11/19 February 2019.
37 High Court of Cassation and Justice, Decision No. 2599/17 June 2020.
38 Constanta Tribunal, Decision No. 576/CA/13 April 2018.
39 Interim Award of 7 June 2018 rendered in case 4/2018 of The Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania.
40 Bucharest Court of Appeal Decision No. 86/05 November 2019.
41 Bucharest Court of Appeal Decision No. 223/11 November 2020.
42 Bucharest Court of Appeal Decision No. 86/05 November 2019, Decision No. 107/19 December 2019.
43 High Court of Cassation and Justice, Decision No. 857/21 May 2020.
44 High Court of Cassation and Justice, Decision No. 1341/01 July 2020.
45 Bucharest Court of Appeal Decision No. 43/20 June 2019.
46 Pursuant to Article 575 (2) CPC, the fundamental principles of the civil lawsuit (e.g., the court's active role, equal treatment of the parties, right to defence) shall apply accordingly to the arbitral procedure.
47 Bucharest Court of Appeal Decision No. 129/19 November 2018.
48 Bucharest Court of Appeal Decision No. 11/10 February 2020, Decision No. 90/08 November 2019.
49 Bucharest Court of Appeal Decision No. 12/19 February 2019, Decision No. 39/07 June 2019, Decision No. 78/28 October 2019.
50 Bucharest Court of Appeal Decision No. 22/02 April 2019, Decision No. 86/05 November 2019.
51 Bucharest Court of Appeal Decision No. 59/29. March 2021.
52 Bucharest Court of Appeal Decision No. 437/12 March 2019.
53 Bucharest Court of Appeal Decision No. 1076/11 June 2019.
54 Oradea Court of Appeal, Decision No. 41/16 February 2021.
55 Bucharest Tribunal, Decision No. 2594/14 December 2020.
56 Bucharest Court of Appeal Decision No. 22/02 April 2019.
57 Bucharest Court of Appeal Decision No. 23/18 March 2019.
59 C Leaua and FA Baias, Arbitration in Romania. A Practitioner's Guide (Wolters Kluwer, 2016), pp. 372–373.
60 Ioan Micula, Viorel Micula and others v. Romania (II) (ICSID Case No. ARB/14/29); Ömer Dede and Serdar Elhüseyni v. Romania (ICSID Case No. ARB/10/22); Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1); EDF (Services) Limited v. Republic of Romania (ICSID Case No. ARB/05/13); Noble Ventures, Inc. v. Romania (ICSID Case No. ARB/01/11).
61 Marco Gavazzi and Stefano Gavazzi v. Romania (ICSID Case No. ARB/12/25); Hassan Awdi, Enterprise Business Consultants, Inc and Alfa El Corporation v. Romania (ICSID Case No. ARB/10/13); Ioan Micula, Viorel Micula and others v. Romania (I) (ICSID Case No. ARB/05/20).
62 S&T Oil Equipment & Machinery Ltd v. Romania (ICSID Case No. ARB/07/13).
63 The Rompetrol Group NV v. Romania (ICSID Case No. ARB/06/3).
64 ICSID Case No. ARB/14/29.
69 ICSID Case No. ARB/05/20.
70 Arif H Ali, A de Gramont, HD Hranitzky and D Dózsa, 'Intra-EU Arbitral Award Enforced in the U.S. - Achmea Objection Dismissed by D.C. District Court for the First Time', available at www.lexology.com/library/detail.aspx?g=7be70ba7-6667-4d0a-998b-597e4dce7d06.
71 R O'Grady, 'Micula v Romania: The next chapter', available at https://www.lexology.com/library/detail.aspx?g=a3c04b4d-7372-43e1-a6a5-15e2ed6e5055.
72 European Commission decision 2015/1470 of 30 March 2015.
73 European Union's General Court judgment of 18 June 2019 in cases T-624/15, T-694/15 and T-704/15.
74 Case C-638/19 P.
76 See footnote 71.
77 Bucharest Tribunal Decision No. 1556/24 November 2014.
78 Bucharest Court of Appeal Decision No. 1483/21 October 2019.
81 ICSID Case No. ARB/20/35.
82 ICSID Case No. ARB/20/15.
83 ICSID Case No. ARB/19/21.
84 ICSID Case No. ARB/18/30.
85 R Abu-Manneh and MM Hasofer, 'Global International Arbitration Update', available at www.lexology.com/library/detail.aspx?g=5ea069fc-4a72-4783-8b14-8f9b85882528.
86 ICSID Case No. ARB/18/19.
88 ICSID Case No. ARB/16/19.
90 ICSID Case No. ARB/15/31.
92 ICSID Case No. ARB/14/28.